Gold Awaits Key Economic Data Amid Dollar Fluctuations and Rising Chinese Demand
Today's markets analysis on behalf of Joseph Dahrieh, Managing Principal at Tickmill
August 29, 2024 (Investorideas.com Newswire) Gold has experienced fluctuating movements this week, mainly in anticipation of upcoming economic data releases that could significantly influence its trajectory. The recovery of the US dollar, which recently hit its lowest level this year, is also playing a role in limiting gold's upward momentum.
Today, the second estimate for Q2 GDP and the latest initial jobless claims are expected, while the Fed's preferred inflation measure, the PCE price index, will be released on Friday. These data points are crucial as they will help the market gauge the likelihood of a rate cut by the Federal Reserve next month. The market is currently divided on whether the Fed will implement a 25 or 50 basis points cut, with a cumulative rate cut of 100 basis points anticipated this year. Any indication of a slowdown in economic growth could bolster gold demand.
Chinese demand for gold has resurfaced as a potential supportive factor, with net gold imports via Hong Kong rising by 17% in July, marking the first increase since March. This resurgence, If sustained, coupled with a healthy demand from central banks in emerging economies and increased net flows in the ETF market, can support the potential for gold to maintain its upward trend. Additionally, geopolitical tensions, particularly in the Middle East, continue to provide a supportive backdrop for gold prices.
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